Binding Term Sheet to Supply 200MW Energy to Baobab Resources in Mozambique
Kibo Energy PLC (‘Kibo’ or the ‘Company’), the multi-asset, Africa focused, energy company is pleased to announce that it has signed a binding term sheet (the ‘Agreement’) with Baobab Resources Ltd (‘Baobab’) to supply c. 200MW energy to its Tete Steel and Vanadium Project (‘TSV Project’) in Mozambique.
· Baobab to exclusively deal and negotiate with Kibo regarding entering into a Power Purchase Agreement (‘PPA’) to supply c. 200MW energy to its TSV Project in Mozambique
· Located approximately 36km away from Kibo’s Benga Power Plant Project (‘Benga’), the TSV Project is recognised as a key development project in Mozambique
Louis Coetzee, CEO of Kibo, said: “We are delighted to have secured this strategically important agreement with Baobab. The TSV Project represents one of Mozambique’s key development projects that could contribute significantly to the growth of the country. We are therefore delighted that our Benga project will be supporting this growth by providing 100% of TSV Project’s c. 200MW energy requirements, subject to reaching final agreement on an appropriate PPA. This PPA will be one of a number of supply agreements we are targeting for Benga, in line with our commitment to creating reliable, sustainable and affordable electricity in Mozambique and we look forward to providing further updates in due course as these agreements progress. It is envisaged that the c. 200MW requirement of the TSV Project will be developed as part of the existing Benga Power Project, and talks are currently underway with our JV-partners in Benga, to determine whether the latest addition to the Benga portfolio will have any impact on the economic interest of each JV partner, given Kibo’s added efforts in increasing the utilisation of Benga.
We look forward to updating the market with further developments in due course”.
Kibo remains focused on developing the Benga Power Plant Project in Mozambique with its joint venture partner, Termoeléctrica de Benga S.A, which will now comprise a thermal power plant with min capacity of 350MW, as well as planned renewable energy projects. To this end, it has signed a binding term sheet with Baobab to supply the complete c. 200MW energy requirements to its TSV Project.
Located approximately 36km away from Benga, TSV is being developed to produce half a million tonnes of construction steel per annum and is construction-ready with all licences, concessions, and agreements in place. This is recognised as a key development project in Mozambique and is set to be the anchor industry for the Revuboe Industrial Free Zone (‘RIFZ’), Mozambique’s newest and largest industrial zone.
Under the terms of the Agreement, which is valid until 30 September 2020 (or such extended date as may be agreed upon in writing between the parties), Baobab agrees to exclusively deal and negotiate with Kibo with regard to entering into the proposed PPA. Kibo can continue to seek and secure other PPAs, including the agreement it is currently pursuing with Mozambican state-owned electric utility Electricidade de Mocambique (‘EDM’) (see RNS dated 11.05.20 for further information) providing that such agreements do not negatively affect the uninterrupted supply of 100% of the energy needs and requirements of the TSV Project.
For more information on Baobab Resources LTD and the TSV Project please follow: http://www.baobabresources.com/
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